Scandinavian carrier SAS has signed an agreement for a SKr3.3 billion ($335 million) three-year revolving credit facility which is 90% guaranteed by the Swedish and Danish governments.

The debt package, which has already been approved by the European Commission, will “support the airline’s liquidity and prepare for the recovery of its activities”, says SAS. The airline is also in talks with Norway’s government for an additional NKr1.7 billion ($165 million) of state-guaranteed funding.

In March, Sweden’s national legislature approved a proposal to issue credit guarantees of up to SKr5 billion to airlines, of which SKr1.5 billion was to be allocated to SAS. Similar measures were approved by Denmark. Both governments are shareholders in the airline. The European Commission approved the plan in mid-April under temporarily relaxed state-aid rules.

SAS says it worked with four Nordic banks as well as respective government agencies to clarify the criteria and terms for the guarantees. The credit facility was co-ordinated by SEB.

Danske Bank, Nordea, SEB and Swedbank acting as mandated lead arrangers.

“The agreement strengthens our financial position in a difficult period when most of our fleet is grounded,” states SAS chief financial officer Torbjorn Wist. “Going forward, we will continue our focused work on reducing costs and seeking additional support from the Scandinavian governments to ensure that SAS continues to be the leading provider of critical airline infrastructure in Scandinavia.”

SAS announced on 28 April that it would eliminate up to 5,000 full-time roles as it sought to adapt to a “lower-demand environment” which could last for several years.